HHSC Kauai faces budget crunch

WAIMEA — The new CEO for Hawaii Health Systems Corp, Kauai said they haven’t ruled out workforce reductions.

Peter Klune said Friday the exact numbers haven’t been audited but the health care provider is still in the hole. Meanwhile, new services and clinics are in the works.

“What these figures mean is we don’t have the revenue to pay for the services we deliver,” said Klune, who took office three months ago. “This year, the state legislature did not appropriate funds and this means we’re looking at an additional $3 million shortfall for the Kauai region.”

The HHSC Kauai region includes the Samuel Mahelona Memorial Hospital, the Kauai Veterans Memorial Hospital, the West Kauai Medical Center, as well as outpatient clinics at Port Allen and a clinic in Kalaheo. Klune said these facilities involve about 400 employees.

Klune spoke to The Garden Island a day after The Associated Press reported the Oahu region planned to cut 64 positions at Leahi Hospital and Maluia as it faces an estimated $3.7 million deficit in fiscal year 2016. It will also be halting new admissions while it grapples with funding issues.

Klune, while not ruling out workforce reductions for the Kauai region, said he has been in discussions with the board of directors, physicians, department heads, managers, and employees about the budget.

“There have been good ideas brought forward,” he said. “We need to come up with a plan on how to fund this $3 million, and that is a work in progress.”

He said the Kauai region is unique in that it provides services the other HHSC properties do not, including psychiatric services and long-term care.

“We have stopped hiring for new positions for the past several months,” Klune said. “We are looking at all of the expenses, including areas of space rentals, consultant fees, and anything we can do to contain costs.”

Klune said most of the money involves the 4 percent wage increase through collective bargaining and retiree health benefits.

The Kauai region has shown operating losses since 2010, when it had a $16 million shortfall. In 2011, the Kauai region finished $12.1 million short, in 2012, it showed a deficit of $15.6 million, rising to a $20 million loss in 2013 and ended 2014 with a $16.1 million deficit.

It estimates a deficit of between $13 and $14 million for fiscal year 2015, which ended June 31. Funds allocated by the Legislature help, but still leaves them about $3 million short.

“We will not take beds out of service, nor cut any of our services to patients,” Klune said.

Despite the money woes, there have been bright spots. On the horizon is the projected fall opening of the clinic in The Shops at Poipu.

The CEO said the Kauai region rolled out its new electronic medical records July 1, which has been a success. The system makes patient data available so doctors can better help patients.


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